Global ratings agency Moody’s has withdrawn the Caa1 credit rating for Pan-African housing financier Shelter Afrique nearly a year after it lost its top credit rating owing to concern over the state of its finances.
Moody’s made the decision mid last month but has not provided the reasons.
But Shelter Afrique acting managing director Femi Adewole downplayed the withdrawal saying it was taken after his organisation requested for the action.
“Shelter Afrique wrote to Moody’s to withdraw from the rating. The reason for that is that at present we are executing a turnaround for the institution: the rating is not particularly useful to us,” he said.
He said there was nothing sinister about it, adding that the rating will resume after the agency’s finances stabilise.
“The primary purpose for ratings for us is that we wanted to access the capital markets.
Currently there is no intention to do that while we continue to make a lot of progress in turning around the institution. Once we have done that we will engage with Moody’s and any of the credible ratings agencies out there,” he said.
Moody’s says it may withdraw a credit rating for several reasons. They include when an entity provides “incorrect, insufficient or inadequate information” to effectively assess the creditworthiness or when a firm is faced with bankruptcy or liquidation. The ratings agency can also stop its ratings when a firm being rated requests the withdrawal or is in the process of reorganising.
Shelter Afrique turned to the 44 Shelter Afrique member states who are its shareholders late last year for Sh9.2 billion to steady its finances after year of turbulence.